Small employers may have a pass from many of the big Affordable Care Act (“Obamacare”) provisions - such as the Employer Shared Responsibility Fees - however, they are not immune from the ever-increasing compliance and administrative requirements.
According to a 2014 survey by the National Small Business Association, small employers spend an average of 13 hours or $1,274 a month just to keep up with Affordable Care Act compliance.
As small employers navigate the new healthcare reforms, they are turning to their health benefits advisors and ACA compliance software platforms for help.
What are the top healthcare compliance concerns of small employers? Let’s take a look.
Top 5 Healthcare Compliance Concerns of Small Employers
Small employers don’t have to deal with the Employer Shared Responsibility and extensive healthcare reporting that larger employers do, however there are a few compliance concerns employers of all sizes shouldn’t ignore.
For small employers, defined as fewer than 50 FTE employees, the top compliance concerns are:
1. Exchange Notice Management
All employers covered by FLSA are required to provide employees a notice about the availability of the Affordable Care Act’s Health Insurance Exchanges (Marketplaces). There are template notices available and employers should verify they are meeting the Exchange (“Marketplace”) notice requirements, as well as other health plan notice requirements.
2. Benefits Plan Structure
Any employer offering health benefits must ensure the health plan meets new standards for plan structure. For example, the new “Market Reforms” require all group health plans to cover preventive care without cost-sharing and not place an annual or lifetime limit on essential health benefits.
And, depending on the type of benefits offered (ex: group health insurance policy or self-insured medical reimbursement plan), there are additional plan structure requirements to abide by (see this checklist).
3. Eligibility and Enrollment Requirements
Any employer offering health benefits must also ensure new eligibility and enrollment requirements are followed. For example, the ACA requires a maximum waiting day of 90 days and new health plan notices are required at enrollment, and throughout the year.
4. Minimum Essential Coverage
On top of mind for many small business owners - especially self-employed and micro business owners, is the requirement for all individuals to have minimum essential coverage. In other words, they must have qualified health insurance coverage regardless if it is available through work. This means small business owners (and employees) are looking for compliant ways to have the business help employees with the cost of individual health insurance.
5. Calculating Full Time Equivalent Employees
The last top ACA compliance concern for small and growing businesses is to not become an applicable large employer (ALE), where the Employer Shared Responsibility provision would come into play.
Employers on the cusp of 50 FTE employees are seeking to understand the ACA’s definition of a full time employee and are evaluating hiring and staffing decisions with this in mind.
These top five ACA compliance concerns have many small business owners seeking ways to better understand and manage compliance. As such, employers are turning to their health insurance adviser or health benefits company for advice, while others are utilizing new ACA compliance technologies to understand and implement compliance, while reducing administrative time.
If you’re a small business owner or a health insurance professional, what compliance concerns would you add to the list? What is top of mind for you? Leave a comment and join the conversation.